For the cruise industry, the coronavirus has been a health emergency, an economic disaster and a public-relations nightmare.
With the US Centers for Disease Control and Prevention maintaining a ban on cruise travel and with many islands, including Grand Cayman, unsure if and when they will allow ships to return, there appears to be no immediate solution on the horizon.
The Royal Caribbean Group recently posted second quarter losses of $1.6 billion. Carnival Corporation reported an adjusted net loss of $2.4 billion for the same period.
Despite that outlook, industry leaders remain optimistic about the long-term future citing the size and resilience of the industry to past shocks, including 9/11 and the 2008 financial crisis.
Michele Paige, president of the Florida-Caribbean Cruise Association, said it was important for the cruise lines, and the island economies they support, that the industry comes back stronger in the long term.
“The Caribbean is the beating heart of the cruise community. With the proper precautions and protocols in place, we expect that cruising in the Caribbean will continue to grow over the long term,” Paige told the Cayman Compass.
The association estimates that countries across the Caribbean have lost around $1 billion in direct economic impact since cruise lines stopped sailing in early March.
While the cruise lines have been severely hit, she said, the industry could withstand the impact.
“This is an experienced, determined and resilient industry,” Paige said, “and we are confident that cruisers will return to the seas just as they will return to other forms of travel, when the time is right.”
She said work was taking place to develop protocols that could allow cruise lines to operate in the new environment.
Trend towards larger ships to continue
Asked about Grand Cayman’s cruise pier debate, she said the island should do what it thought was best for its people. But she suggested the trend of moving towards larger cruise ships that will not tender would continue over the coming years.
Marie McKenzie, of Carnival Corporation, made similar comments in a roundtable discussion hosted by the Caribbean Tourism Organization last month. She said Carnival had sold off 13 ships in the aftermath of COVID-19, but had held on to its larger ships.
“We have to make sure the ships we have out there are really attractive to our guests,” she said.
In a 30 June business report, Carnival Corp CEO Arnold Donald said the company had “aggressively shed assets” and scaled back development of new ships to cut costs.
“We have taken a significant hit. We literally have no business coming in at this time,” said McKenzie.
She said the primary focus in the past months had been on getting 80,000 staff and 250,000 guests home.
A map of global marine traffic shows ships that normally ply their trade in the Caribbean now anchored off Manila in the Philippines, after travelling the globe to return staff to their home countries.
Despite the current hardship, McKenzie said Carnival was still seeing strong demand for cruises. She expects the business and the industry to come back as strong as ever.
“We do believe demand could even be greater. This is not a cruise issue,” she said.
‘A medical catastrophe, financial Armageddon’
Rick Sasso, president of MSC Cruises, said the industry had come through challenges in the past and would come through this one.
“Everyone that is significant in this business is going to survive,” he said, predicting that a COVID-19 vaccine would solve the issue swiftly.
Sasso said the coronavirus had been a “a medical catastrophe, logistical nightmare and financial Armageddon”. But he insisted that was the case for everybody – not just the cruise industry.
“We will figure out how to come through it, but we won’t start cruising until we know it is healthy,” he said.
He acknowledged the industry would have to build back consumer confidence with the reputation of the sector taking a hit. But he said the cruise lines would work with scientists and public-health experts to demonstrate that cruising was safe.
Russell Benford, vice president of government relations for Royal Caribbean, said discussions were ongoing over how to get cruise ships operating safely while the virus still lingers.
“We are doing a lot of tough research,” he said. “We are in the weeds. We are all working with experts in their respective fields to make sure we do this in the right way.”
He said cruise lines wanted to work in partnership with governments in destinations across the Caribbean to get the industry up and running again.
“Tourism is a huge component of some nation’s economies,” he said. “We are talking about how do people survive, how do folks get back to work, how do they feed their families, how do they send their children to school, how do they pay their mortgage? The cruise industry is one component of that.”